Chan v Cresdon Pty Ltd [1989] HCA 63

High Court of Australia Mason C.J. Brennan, Deane, Toohey and McHugh JJ. Chan v Cresdon Pty Ltd [1989] HCA 63

ORDER Appeal allowed with costs. Set aside the orders of the Full Court of the Supreme Court of Queensland in so far as they relate to the appellants and in lieu thereof order that the appeal to that Court, in so far as it relates to the appellants, be dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Dec. 14 Mason C.J.,Brennan, Deane and McHugh JJ.

The appellants were parties to an agreement for lease executed in March 1984 pursuant to which the respondent agreed to lease for a term of five years certain land in Queensland to Sarcourt Pty. Ltd. ("Sarcourt"), and the appellants were named as guarantors of Sarcourt. The agreement provided that the parties would execute a lease in the form which was annexed to the agreement. The form of lease contained a further guarantee by the appellants of the obligations of Sarcourt as lessee. A lease in that form was executed simultaneously with the agreement for lease, but was not registered with the Registrar of Titles notwithstanding that the land was under the Real Property Act 1861 Q. ("the Act").

The respondent brought proceedings against the appellants and Sarcourt claiming a sum of $28,877.70, being the total amount payable by Sarcourt as lessee for rent and other charges and interest. Sarcourt did not appear in the action and the respondent proceeded against the appellants and a third person also named as a guarantor. The appellants successfully contended in the District Court that there had been a total failure of consideration on the part of the respondent as lessor because it had been required to grant to Sarcourt a legal lease for a term of five years, and that accordingly the appellants were relieved of their obligations as guarantors described in the executed instruments.